The Vending Market in Germany in 2009-2010 - Press1

The Vending Market in
Germany in 2009-2010
Introduction
Thanks to the return of generally favourable economic conditions, the German
vending sector developed positively in 2010. Food and drink vending machines are an
integral element in today’s commercial sector, and they are now more widely
accepted by consumers than ever before.
Market data
Sales of vending machines in 2009
Every year the BDV conducts a survey concerning new vending machines that were
added to the market in Germany during the previous year. The survey has produced
the following figures in recent years:
Type of vending 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
machine
Cold-drink machines 13,700 12,700 12,500 8,000 5,300 4,700 3,800 3,400 4,100 4,000 2,500
Hot-drink machines 15,500 8,800 7,000 6,700 7,100 8,400 4,500 7,400 6,500 5,800 5,000
(free-standing)
Hot-drink machines 15,600 18,700 28,600 31,200 35,800 30,000 27,000 20,000 23,200 31,000 26,500
(table-top)
Snack and food 4,350 5,000 8,500 6,400 5,500 5,300 4,100 3,000 3,900 3,500 3,200
machines
Total 49,150 40,700 56,600 52,300 53,700 48,400 39,400 33,800 37,700 44,300 37,200
Number of vending machines in Germany at the start of 2010
The business research institute Datamonitor regularly determines the number of food
and drink vending machines in Germany and the total turnover generated with them.
The results show there were around 513,299 vending machines in Germany at the
start of 2010, distributed as follows:
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No. of machines as of 1st January 2010
Snacks and food
87,260
17%
Cold drinks
148,857
29%
Hot drinks
277,182
54%
These figures show there was one vending machine for every 157 people in
Germany.
Datamonitor surveys also provided the data for the turnover generated through the
sale of drinks and snacks from vending machines in 2009. In 2009 the sale of drinks
and snacks from vending machines in Germany generated a total turnover of about
€2.5 billion, which was distributed as follows:
Snacks and
food
€502 million
20%
Turnover in 2009
Hot drinks
€1.12 billion
45%
Cold drinks
€865 million
35%
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In 2009 Germans therefore spent €30 per capita on snacks and drinks from vending
machines.
Overview of vending sector companies
It is estimated that there are approximately 1,000 professional operators of food and
drink vending machines in Germany. Most of these enterprises are family-owned
businesses with a regional scope. New companies were again established in the
sector in 2009, while small and medium-sized businesses were taken over by larger
companies. Although the overall structure of the sector has changed little in recent
years, some of the major companies have been steadily growing.
Development of the market in Germany
Today, about 40 years after the professional operation of food and beverage
machines began in Germany, the market has become saturated to a certain extent.
But there continues to be growth potential, which is also being exploited.
The stabilization of the general economic situation had a positive impact on business
this year. Consumption has further increased in the in-company market segment,
where consumers are traditionally very price-conscious and where most vending
machines are operated. The operators have succeeded for the most part in
recovering from the turnover decline they suffered in the crisis year of 2009, and
some even posted growth.
Production facilities continue to be the most common location for vending machines,
which provide drinks and snacks for employees. Even though many vending machine
locations have disappeared from the industrial sector in recent years due to plant
closures and workforce cutbacks, vending machines have been introduced in newly
established smaller companies to replace canteens that became unprofitable.
In offices and administrative areas, small hot-beverage machines (table-top) are
increasingly being used. These machines for coffee specialities are replacing coffee
machines for private use in the workplace. There are various reasons for this:
• The electricity costs for the privately used coffee machines are far higher than
those for a vending machine.
• The machines in private use, which usually are not subject to technical
inspections, pose a continuous risk of fire or injury.
• And popular coffee specialities, such as latte macchiato or cappuccino, cannot
be prepared with the private-use coffee machines.
A particularly remarkable development is the vending sector’s increasing success in
the catering area. Table-top hot-drink machines are being used in cafeterias and
small cafés, and by hotels, for their conference rooms and breakfast buffets.
In hotels, machines for snacks and cold beverages are increasingly replacing
unprofitable minibars.
The sector also achieved growth in 2010 when it came to vending machine use in
schools, where a growing demand for food machines has developed because all-day
schooling is becoming more common.
All in all, these developments made 2010 a good year for the vending sector —
thanks in particular to the speciality coffee boom in Germany.
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Vending machine success factors
• Vending machines are part of a general trend
Today’s consumers have a positive attitude towards technology. Vending
machines can be found everywhere. Over 70 per cent of cash withdrawals are
made from cash machines. Vending machines dispense travel tickets, stamps
and everyday items, especially drinks and small snacks. At large companies,
vending machines for drinks and snacks are now virtually the only channels
employees use to buy their food and drinks at work. Schools, universities,
hospitals, airports, train stations and filling stations are also sites where
vending machines have become indispensable.
Vending machines are popular especially among young people. Anyone who
learned to use PlayStations and computers while still a kid will have no
difficulties operating a vending machine, while seeing the machine as a kind of
“partner”.
How much the image of vending machines has improved in recent decades is
especially evident in TV films: While a commonplace scene in crime stories
used to involve a vending machine dispensing only hot water instead of coffee
to a police superintendent, in today’s TV series, modern vending machines are
portrayed as a kind of “lifestyle equipment” — which now includes vending
machines as well as mobile phones.
• Vending machines are suited to the eating habits of today’s consumers
We live in a mobile society today. People eat and drink at virtually any time of
the day or night, and in every kind of location. “Coffee to go” has become a
global phenomenon. Vending machines are perfectly positioned to meet
consumers’ needs: They are available 24 hours a day, seven days a week, at
widespread locations, and they take up little space.
• The professionals behind the vending machines
The operators are coffee specialists with a wealth of know-how and
experience in terms of the products, electronics, payment systems and local
marketing, and the safety factors related to food and machinery.
• The quality and variety of products prepared inside vending machines
have improved
This is especially true of coffee, speciality coffees, hot chocolate, teas and
soups. Thanks to enhanced brewing technologies and the products that are
used, the quality of the coffee is now considered to be on a par with that served
in upscale catering settings.
Vending machines are therefore now an important sales channel for coffee, the
most widely consumed beverage in Germany: Nearly two billion portions of
coffee are prepared and dispensed by vending machines in Germany every
year!
The wide variety of hot-drink vending machines, from espresso machines to
specialty vending machines for instant bean coffee, makes it possible to enter
new market segments that previously were not covered by the vending
machine sector. Today vending machines can be found in hotel breakfast
rooms and conference facilities, for example, and in museum cafeterias.
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In the catering sector in particular, the number of table-top hot-drink machines
has increased considerably in recent years. Thanks to the increasing use of
small machines, consumers in offices and production facilities can more
frequently enjoy an espresso at the push of a button.
• The reliability, visual appeal and user-friendliness of modern vending
machines have made them more accepted by consumers
Today’s vending machines have little in common with the comparatively
primitive metal boxes of the past. State-of-the-art design, easily recognizable
operating elements, user-friendly operation, additional banknote and card
readers, lighted fronts, and lifting mechanisms in cold drink machines have
made vending machines so attractive that they are also increasingly winning
over discerning customers.
• New systems and designs are making vending machines even more
appealing
Drink machines with glass doors increase the probability of impulse buying,
while machines with robot technology are eye-catching and have a customerfriendly
dispensing system within easy reach. There are now coffee vending
machines that also dispense lids with their coffee-to-go cups, making them the
world's smallest “coffee shops”. More and more vending machines also feature
screens that display information on the products and are used as operating
interfaces.
A new development, especially in smaller businesses and schools, are menu
vending machines in which delicious meals are prepared and delivered ready
to eat.
• Operators are reacting to what consumers want
Product ranges for use in vending machines today include organic and fair
trade food and drinks, products cultivated in a sustainable manner, regional
foods from farms, low-calorie food, fruit, salads, and other fresh products, as
well as popular soft drinks, energy drinks, sweet and hearty snacks, hot
beverages and soup.
• Vending machines are installed as a “service to customers”
Today, drinks and snacks are increasingly being provided by vending
machines to people as they are waiting for their trains and planes to depart or
for their car tyres to be changed, waiting in line to register their new automobile
or for their case to be heard in court, or waiting for their furniture purchases to
be brought to a store’s pick-up area.
• Well-known brands boost confidence in vending machines
The acceptance of vending machines has been strengthened by the
commitment of large companies in the food industry to the vending machine
business and the use of well-known brands as filling products in the machines.
These brands include Bahlsen, Barry Callebaut, Bionade, Campina, Coca-
Cola, Dallmayr, Ferrero, Frosta, Kraft Foods, Lavazza, Mars, Nestlé, Pepsi
Cola, Red Bull, Sinalco, Tchibo and Unilever.
• The areas of use for vending machines are continually expanding
As vending machines become more widespread and accepted, a steady
stream of new ideas is making the range of goods the machines dispense
more and more diverse. Besides offering the normal range of food and drinks,
vending machines are now also used to sell books, DIY tools, shoes, ladies’
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underwear, swimsuits, jeans, batteries, mobile phones, electronic accessories,
souvenirs, umbrellas, votive candles, magazines, works of art, toiletries, bait for
fishing and even gold ingots. And industrial companies often use machines to
dispense tools and safety equipment.
Deserving of special mention is the large number of machines in Germany that
accept empty bottles, soda cans or plastic tubs and pay back a deposit or give the
customer a receipt.
Negative factors
• Although opportunities for consumers in small communities and suburbs to
purchase drinks and small snacks have become more limited in recent years,
some municipal authorities are sharply restricting the scope for installing food
and drink vending machines on public roads. The BDV is therefore
campaigning for liberalisation of construction regulations and planning laws.
• The costs of “coin removal” — in other words the fees paid to banks and
armoured car services for receiving the coins from vending machines — are
continuing to rise and are causing high cost burdens for the operating
companies.
• The banks’ rigid rating system for granting credit is leading to large additional
strains — especially in the operating business, which involves major
investments — and it is inhibiting purchases of new vending machines.
• In many large companies where vending machines are essential for supplying
staff with snacks, the works councils and plant managers are increasingly
becoming more interested in securing the lowest possible price instead of
ensuring that services and products are of high quality.
Current issues in the vending sector
• Data transfer from and to vending machines, which is already being integrated
into a growing number of machines, will make them more customer-friendly and
will reduce the need for technical maintenance and services to help with filling the
machines. What’s more, permanent monitoring of turnover and identification of the
products that are most in demand is being made possible by telemetry.
• The range of different types of vending machine payment systems is growing.
Coin systems are still the most common, but around 25 per cent of all vending
machines now feature cashless payment systems. Although closed, in-company
systems generally use non-contact chip cards, some vending machines allow
customers to pay with bank cards (GiroCard), debit cards and credit cards — and
now payment can also be made with non-contact chip cards, such as
MasterCard’s PayPass system. More and more machines are also accepting
banknotes in addition to coins.
While payment via mobile phones poses no technological problems for vending
machines, such systems haven’t been successful on the market so far.
• Public vending has great market potential that is being increasingly exploited.
Vending machines are therefore becoming more common at train stations, bus
stops, motorway petrol stations, airports, sports and leisure facilities, DIY stores,
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department stores, administrative offices, universities and other public facilities
such as hospitals.
• Water coolers are found in an increasing number of companies and offices and
are expanding the range of vending machines for beverages and snacks. They
include point-of-use water coolers as well as machines using bottled water that are
independent of the pipe network.
• Ever since a regulation for the introduction of vending machine professions
went into effect in Germany in early 2008, many young people have been training
at operating companies as either vending machine servicing specialists (two
years of training) or as vending machine specialists (three-year training). With
these training programs, the companies in the vending machine industry are now
able to train their own teams of qualified young professionals.
• The trend towards organic food, fair trade produce and food cultivated in a
sustainable manner can also be observed in the vending business at schools
and universities, especially in the area of public vending.
• Due to their coffee expertise, an increasing number of vending machine
operators are being commissioned by major companies to set up coffee corners
for their employees. The premium products offered at these “miniature
Starbucks” help win over discerning customers who have an espresso machine at
home and previously were not inclined to use vending machines.
Conclusion:
The vending machine sector’s role as a service industry is widely recognized.
Given that high labour costs will continue to limit the degree to which services can be
provided by personnel, vending machines will be used in more and more areas as a
means of distributing products 24 hours a day, seven days a week.
And the availability of drinks and snacks at affordable prices from vending machines
makes it possible for everyone to consume popular products (the McDonald’s effect).
In light of these developments, the vending machine sector is looking to the future
with optimism.
(2nd February 2011)
Bundesverband der Deutschen Vending-Automatenwirtschaft e.V.
(German Vending Association)
Weißhausstr. 36-38, 50939 Köln, Germany
Tel. + 49 (0)221 447968, fax + 49 221 422522
info@bdv-vending.de, www.bdv-vending.de
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